Market and Institutional Ownership Reactions to REIT Security Issuances

Daniel Huerta (), Thanh Ngo () and Mark K. Pyles ()
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Daniel Huerta: Florida Gulf Coast University
Thanh Ngo: East Carolina University
Mark K. Pyles: School of Business

The Journal of Real Estate Finance and Economics, 2024, vol. 69, issue 1, No 6, 164-199

Abstract: Abstract This paper examines market and institutional ownership reactions to REIT security issuances. Specifically, we examine the short- and long-term market performance of issuing REITs compared to their non-issuing counterparts. We additionally examine changes in systematic and idiosyncratic risk curtailing from security issuances as well as institutional ownership shifts stemming from the sale of new securities. We find that equity issuances are met with negative market reaction in the event window, while there is no significant immediate market reaction to debt issuances. Buy-and-hold abnormal returns are generally higher for equity issuers in comparison to debt-issuing and non-issuing firms. We also find that equity issuances increase systematic risk exposure while both types of security issuances reduce idiosyncratic risk. Finally, we document that serial issuers of both equity and debt see increases in institutional investment following issuances.

Keywords: REIT security issuances; REIT market performance; REIT institutional ownership; REIT security offerings (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11146-022-09926-9

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